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SEC Enforcement Chiefs Defend Effectiveness of Enforcement Activity During Fiscal 2018

October 30, 2018

SEC Enforcement Division Co-Directors Stephanie Avakian and Steven Peikin recently gave speeches looking back on fiscal year 2018, which ended on September 30 and was their first full fiscal year in office. Both speeches dispute the notion that fiscal year 2018 saw a decline in the SEC’s enforcement activity.

In her September 20 speech, Avakian states, “Statistics such as the number of actions the SEC brought in a fiscal year and the dollar amount of judgments and orders obtained in that year … do not provide a full and meaningful picture of the quality, nature, and effectiveness of the Division’s efforts.” With reference to the five core principles articulated in the enforcement division’s fiscal year 2017 annual report (discussed in November 2017 edition of The Ticker), Avakian argues that measuring the “nature and quality” of the SEC’s actions during fiscal year 2018 shows that it has been a “strong year” for the division.

Also arguing against a narrow focus on statistics, Peikin’s October 3 speech examines one of the enforcement division’s five core principles: imposing sanctions that most effectively further enforcement goals. According to Peikin, the division is guided by three questions when thinking about what form of relief makes the most sense in a given case: “Does the relief punish bad actors and restore money to harmed investors? Does it advance the goals of specific and general deterrence? And does it put into place meaningful protections for investors going forward?” Peikin then highlights several recent instances of the SEC obtaining non-monetary relief, including undertakings and conduct-based injunctions and bars and suspensions.

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